Physical Sciences Inc. (PSI) is completing a Phase II program demonstrating a compact research instrument that integrates adaptive optics (AO) into a line scanning ophthalmoscope (LSO). The bench-top AO-LSO instrument significantly reduces the size, complexity, and cost of research AO scanning laser ophthalmoscopes (AOSLO), with the goal of transitioning adaptive optics imaging into routine clinical use. The PSI AO-LSO produces high resolution retinal images with only one moving part and a significantly reduced instrument footprint and number of optical components. The AO-LSO has a moderate field of view (3.5x5 deg), which allows montages of the macula or other targets to be quickly and efficiently obtained. An OCT channel also serves as the AO beacon. In a preliminary human subjects investigation, photoreceptors were resolved and counted to within ~0.5 deg of the fovea. Photoreceptor counts closely matched previously reported histology. The capillaries surrounding the foveal avascular zone were well-resolved, including the blood cells flowing within them. Individual nerve fiber bundles were resolved, especially near the optic nerve head, as well as other structures such as the lamina cribrosa. In addition to instrument design, fabrication, and testing, software algorithms were developed for automated image registration, cone counting, and montage stitching. The goal of a Phase II B program is technology maturation. PSI proposes to continue early stage product development of the clinical prototype to improve performance, develop a novel patient interface, improve the software user interface, develop automated image analysis routines, and generate interest and private investment to bring the technology to the market. Success in this effort will greatly enhance the likelihood of early FDA regulatory approval. Our overall goal is to commercialize a compact AO system at significantly lower cost that bridges the existing gap between high-resolution laboratory systems and conventional clinical SLO/OCT imaging modalities. The AO-LSO instrument will be refined and enhanced for clinical operation, including an optimized re-design of the optical layout for a smaller footprint, opto- mechanical design of a clinical package, modification of scanning hardware and software for automatically acquiring improved macular montages and photoreceptor density maps. Several components and subsystems will be upgraded for improved performance and clinical adaptability, including pupil tracking and on-line point spread function (PSF) monitoring as an image quality metric. A successful Phase II B program and subsequent Phase III commercial development will provide clinicians with high-resolution, high performance AO imaging at a lower cost and improved functionality superior to other non-AO retinal imagers to help guide therapies and improve patient outcome.